What are RPZs?
Rent Pressure Zones (RPZs) were originally introduced in 2016 in the South as a measure to limit rent increases in areas where rent was rising rapidly. Originally introduced only for Dublin and Cork city, they now extend over much of the country, and are present in 17 of the 26 counties. See RPZ map below:
In order for an area to be designated as an RPZ, the annual rate of rent inflation in the area must have been more than 7% in at least four of the last six quarters, and the rent in the area in the previous quarter must be above the appropriate standardised average rent for that area. These standardised areas are the Dublin area, greater Dublin area (Dublin plus Kildare, Wicklow, and Meath), and the rest of the country. Basically, rents must be increasing at a very high rate compared to similar areas for a local electoral area to be considered an RPZ in the first place.
RPZs originally were capped at a 4% maximum increase per year but given the cost of living crisis, the government in 2021 conceded to cap it to 2% per year or the rate of general inflation, whichever is lower. Rent increases are cumulative if they have not been increased for a number of years – e.g.. if rent has not been increased for 5 years and the 2% cap is the relevant one then a landlord can raise rents by 10%.
RPZs were due to end on 31 December 2024, but the Government extended them until 31 December 2025.
Recently Mícheal Martin has given indications that they may be lifted at the end of 2025, saying that they provide an unsuitable environment for investors. This is part of a wider shift in government policy placing even greater emphasis on the private sector as a means of delivering housing supply.
The report of the Housing Commission has one of its recommendations being the setting of ‘Reference Rents’ as an alternative to RPZs, where the rent of a property would be tied to certain conditions, for example its location, size, and/or energy rating. This is a system similar to some European countries such as Sweden or the Netherlands. There is not currently any detail on how this might work in Ireland, and the Housing Agency are working on a report about this at present, to be published at the end of March.
You can read more about the debates on reference rents in this Dublin Inquirer article here but as it stands there is no clarity on what is being proposed by the Housing Agency or government.
Our Position
Rent Pressure Zones are not a solution to ever increasing rents but their use across wide parts of the country demonstrate how much worse the situation will be if they are lifted. The only legal protection tenants have under the Residential Tenancies Act regarding rent increases in the total absence of RPZs is an increase limited to being in line with other comparable market rents in the area. In practice, this is very flimsy as it is hard to contest and ignores the role large landlords can have in setting and manipulating the market rent in areas.
In CATU we have had members struggling with massive rent increases of 20% mere metres from the boundary of an RPZ which, if they were within, would have greatly improved their situation.
Research by the ESRI found that overall RPZs limited the amount of rent inflation. However this is offset by the fact that in many RPZs average rent increases occurred that were higher than the rules would allow. As CATU members we can all point to why this might be – illegal rent hikes when tenants are not aware of their rights or are afraid to challenge them, upping rent in between tenancies etc. In fact, we can look at publicly available rent data to see many examples of illegal rent increases in RPZs here. This is with the restrictions already in place so we can imagine what this might look like without such protections.
The ESRI also argued that restriction on the private rental sector such as RPZs may have hampered increased supply of housing for rent by making it a less attractive investment. There is also the concern that RPZs incentivise dereliction because if a landlord takes a property off the market for two years it is no longer considered a continuous tenancy, giving them free reign to raise the rent beyond RPZ rules.
These are narratives we should challenge. There is no exodus of landlords from the rental market, and RTB data shows the number of private landlords rose by about 7000 last year. We should also challenge the idea that only the private sector can deliver housing. Ires Reit, the largest landlord in the state, had its shares hit an eight month high after the news of potentially lifting the RPZs dropped. The Irish Property Owners Association (IPOA) has also welcomed their potential lifting. If the private sector can only deliver housing on the assumption that tenants pay an exorbitant amount of rent, then it is not a method fit for purpose. The state should be investing in universally accessible public housing to address the crisis. We also contest the notion that dereliction is a natural result of controls on rent. If anything, this speaks to how landlords will skirt existing regulation for profit and should be more fiercely regulated, not less, and ultimately replaced as providers of housing by the state.
We also take this information as reason to be sceptical about reference rents. The IPOA has been less willing to embrace reference rents as a solution themselves, however the Taoiseach’s comments and general intent to make the private rental sector more attractive as an investment vehicle means we will be watching carefully both what the Housing Agency recommends, and what the government eventually intends to implement. We will aim to influence the Housing Agency report and respond to its release. We will demand they meet with us as the only body of unionised tenants in Ireland who will be directly affected by these changes.
Ultimately our position at present should be that we should not lift the RPZs without a better alternative. This alternative needs to be based on a radical reduction in rents, not just limiting (and almost guaranteeing) a maximum increase. We will keep our focus on the fact that this is part of a wider move by the government to entrust all housing development and management to the private sector, and consistently highlight that the state is the only instrument to deliver housing at scale that can meet people’s needs, and not be for the benefit of landlords and shareholders.
Demands
1. Don’t lift the RPZs: Keep what little protection we have in place until there is a better alternative to protect tenants.
2. Cut the rent: Rents are too high across the board. They need to be radically cut in line with people’s income.
3. Build public housing: We can’t rely on landlords and developers treating renters like cash cows. The state needs to build public housing at scale, and lift the income caps on public housing.